We were talking UK, not America. The UK from what i know has cutback so much that there would be none of that and they don't give a toss where their kit comes from. Tho company i worked for once sold aic con gear to a vehicle builder abroad who then sold the vehicle back to the UK. We have not in a long time supplied the MoD directly and while anything military tends to have a higher price tag just for being military the military market itself is now highly competitive.
America on the other hand only buy gear from there own so there is little incentive to be competitive. Tho company I work for infact would love to get into the american market. We once supplied two systems to a project prototype that ended up in america and were told that they would not use one of our systems on the production because they wanted to use their own.
On the one hand, I can understand, why America wants to make sure their military, is "home grown", as regards suppliers.
But on the other, NATO/Friendly countries, should also be able to supply some military stuff to America, as well.
America would probably gain from it, because (as you already mentioned), it can lower the price they would need to pay, and maybe in some cases, mean they get something better, or as good.
It may even help the fellow NATO/Friendly country, build up their military capabilities.
I guess that the American policy, could be right. As it means that you will have a strong, home grown, military supply base.
I suppose, it is quite a complicated issue, really.
In all fairness, there are often complaints, when the UK Government or military, buys stuff from non-UK sources. Especially, when the UK was able to supply it, and it was just to save a few pennies, that the order(s), were given to a foreign country.
E.g. A very big, UK passport order, being given to France, rather than the long established UK supplier.
https://www.bbc.co.uk/news/business-43489462